There are a number of reasons why a business may need to relocate. Business growth, changing products or shifting economies, amongst others, play a part in a business’s decision to move. As a business weighs up the reasons to relocate, a primary concern has to be how it will affect its business/trading and its customer base.
A recent study in Area Development magazine identified a number of common mistakes made by companies wanting to relocate; focusing on a narrow range of cost issues, ignoring quality of life influences, failing to use the available economic development services, ignoring important regulatory or environmental concerns and failing to plan for further expansion. This list can effectively be boiled down to hurrying too much and trying to move on the cheap.
Here are four key items that cannot be ignored from your business relocation checklist:
If a business needs specially trained employees, this business must be easily accessible to that source of labour. There are also a range of other employee expectations to manage such as public transport accessibility, the cost of living in the local area and also the local culture – will this be a good match to your existing work force, and company ethos?
It is of course not uncommon for a business to start in a small building and eventually grow out of that space. Office rents can also increase to an unaffordable rate and should be a key consideration when relocating. When comparing office rents, a business must factor in the facilities available and their associated cost – it is important to look at the big picture and come up with an accurate projection of setting up and doing business in a new location, not just the price of renting the office space.
Customer And Competitor Base
If a business provides a service to its customers, it must be near this source of income. As neighborhoods change, customer bases could dwindle and a business needs to move to a locale where it can operate profitably.
The direct and indirect competitor landscape should also be considered; moving within reach of a competitor could actually boost your business through, for example, the associated supply chain opportunities/challenges, improvements in customer service and innovation.
Some areas offer tax incentives to attract new businesses, such as property sales tax exceptions, tax abatement, income tax reductions or other tax breaks on infrastructure improvements. Investigation into such tax benefits could save a business a considerable amount of money and, although rarely the sole reason to pick one location over another, it could provide the last push needed to make the decision to move.
These four factors are a useful starting point for a business in the initial stages of deciding on a relocation. They are by no means a definitive guide and it is important to come up with a thorough business relocation plan once the decision to move has been made.
There are many professional companies that can help with the conception of a relocation plan by incorporating tools such as location analytics to allow businesses to make smarter decisions when expanding and relocating. This is achieved by quantifying the benefits of an existing business location and forecasting the advantages of new locales based on a business’s pre-existing data and its specific requirements.